“Serious questions need to be asked about the hospital’s accounts and how they did not notice this money was being used unfairly.

“This food could have been depriving charities in need.”

The Mercy, which also received a €61million cash boost from the HSE in 2012 and a surplus of €1.8million, paid back the money to the Agriculture Department this week.

The spokesman added the hospital only realised it was in the wrong earlier this year when the scheme changed its definition of “disadvantaged people”.

He said: “As an institution with charitable status we felt we complied.

“We applied for the money in good faith before we discovered we were not eligible.”

The spokesman added the aid was a “very small amount of food compared to the total budget we have”.

Under the rules of the Most Deprived Programme the food is meant to be distributed for free.

In a Freedom of Information request by the Irish Mail on Sunday, the hospital was shown to have used the free cheese, rice and butter to dish up all sorts of meals, from risotto, to chicken wraps, to chilli con carne.

The hospital’s record books are supposed to confirm that each allocation of food aid was given to the most deprived.

However, there were no details provided.

A Mercy spokesman added: “As a city centre hospital treating mostly public patients, there was a belief historically that the hospital complied with the terms and conditions of the scheme.

“The hospital is now aware it does not satisfy the scheme’s criteria and whilst the earlier decision to participate was made in good faith, the hospital has ceased all participation in the scheme.”